Market Close: Internet stocks pounded

January 2, 20024:43 PM PST

A mostly languid trading day was interrupted by a late selling binge Thursday as Internet stocks absorbed heavy losses. The Nasdaq closed off 35 points to 2,542.42 while the Dow shed 21 points to end at 10,866.74,

With the U.S trade deficit ballooning to a record $19.7 billion in March and the possibility of an interest-rate hike down the road, investors are disinclined to jump in with both feet.

"You'll see a positive reaction any day there's no inflationary news in the market," said Barry Hyman, market strategist at Ehrenkrantz, King & Nussbaum. "But the Fed has put a cap on the upside."

The Internet carnage was a lately development as most of .coms were only slightly lower at midday.